By Nelson Belen, Contributing Reporter
RIO DE JANEIRO, BRAZIL – According to the latest report from the Brazilian Association of Real Estate Developers (ABRAINC) released yesterday, October 23rd, approximately 42,000 new homes hit the market, and 68,600 homes were sold from January to August of this year.
Those figures represent an increase of 9 percent and 3.4 percent respectively when compared to the same period in 2016.
Additionally, when drawn out over a twelve month period, 73,300 new homes were listed, with 105,300 homes sold during the period, an increase of 4.6 percent and 2.3 percent over the preceding twelve-month period.
According to industry experts, the increase in new home construction and sales could be attributed to a number of factors. “The report, in fact, shows an increase in the number of launches and real estate sales, which may be related to the launches of the Minha Casa Minha Vida project which increased eighty percent in the first quarter of 2017,” said Frederic Michel Cockenpot, CEO and founder of real estate firm, WhereInRio.
“The release of the inactive FGTS accounts and the reduction of the SELIC rate also contributed to Brazilians investing in real estate purchases,” he added, referring to a government measure from earlier this year that allowed nearly 30.2 million workers to withdraw amounts deposited in inactive accounts of the Government Severance Indemnity Fund (FGTS).
As to Minha Casa Minha Vida (My House My Life), the ABRAINC report reveals that the low-income housing program, started by the PT Workers’ Party in 2009, has played a significant role in the increases shown.
According to the report, the number of home listings specifically related to the Minha Casa Minha Vida program increased by 4.9 percent in the last twelve months compared to the previous period. The report also shows a significant increase in Minha Casa Minha Vida sales volume, up 23.8 percent over the previous twelve-month period.
On the other hand, while the middle to high-income real estate sector showed a 3.1 percent increase in the number of new homes hitting the market in the last twelve months, sales in that sector still accumulated a drop of -14.3 percent compared to the previous period.
This divide can also be seen locally in Rio de Janeiro, as Cockenpot explained to The Rio Times. “In Rio, the launches have been concentrated in the west and north of the city of Rio de Janeiro, because they are areas with more empty lands.”
He added, “Our sales and demand efforts continue to be in the South Zone of the city, which continues to be more valued and preferred by most of our customers.”
The Minha Casa Minha Vida (My Home, My Life) is a low-income housing government program begun in 2009. Since then, the government has invested approximately R$300 billion in the program, with more than 4.2 million housing units authorized for construction and 2.62 million units delivered to low-income families.
In February, beleaguered Brazil President, Michel Temer, announced the expansion of the program which the government hoped to stimulate construction of some 600,000 new homes.